"Even If There's Nothing Left to Gain, We Must Win"... POSCO and HDC in a Fierce Showdown for 1 Trillion Won Yongsan Contract

HDC's "The Line" Aims for Image Renewal After Gwangju Accidents
POSCO E&C Bets on "Otier Yongsan" with 4 Trillion Won Funding and Full Han River Views
Both Companies Risk Losses for Pride in a Battle Beyond Profit

POSCO E&C and HDC Hyundai Development Company are fiercely competing for the construction contract for Zone 1 of the Yongsan Maintenance Depot redevelopment project in Seoul. Both companies are presenting new terms daily, resulting in a heated contest. Some even say that the conditions are so aggressive that "there is nothing left to gain even if the contract is won." This is seen not just as a simple competition for the contract, but as a high-stakes battle for survival for both companies, each facing their own crises.

The Yongsan Maintenance Depot Zone 1 redevelopment project is a large-scale initiative that will create 777 apartment units, 894 officetel units, and commercial and office facilities in buildings ranging from 6 basement levels to 38 above-ground floors. The association has set the project cost at approximately 955.8 billion won. The final contractor will be selected at a general meeting scheduled for June 14.

HDC's Aggressive Financial Terms and Construction Costs: "Turning Yongsan into Japan's Roppongi Hills"

'The Line 330' perspective view. Provided by HDC Hyundai Development Company.

After experiencing consecutive accidents in Hakdong and Hwajeong-dong, Gwangju in 2022, HDC Hyundai Development Company was often treated as being on an unofficial "blacklist" for large-scale maintenance projects. The company faced bidding restrictions due to illegal promotions, or was asked to play only an indirect role such as purchasing materials in consortium projects where other companies were chosen as sole contractors. Recently, a one-year business suspension imposed by the Seoul Metropolitan Government further highlighted its "legal risks."

Driven by urgency, HDC Hyundai Development Company has been offering unprecedented terms in this bidding war. The company is persuading association members by guaranteeing a minimum relocation loan of 2 billion won, offering a project loan rate of Certificate of Deposit (CD) + 0.1%, and proposing a construction cost of 8.58 million won per 3.3 square meters. It is also promoting a new brand, "The Line 330," emphasizing Korea's longest 330-meter skyline community.

HDC Hyundai Development Company has declared an industry-first 30-year defect repair guarantee period and is highlighting a new image through a horizontal landmark design called the Sky Community Bridge. Other proposals include a "600-unit Han River view" design and an "integrated connection development plan" linking Yongsan Station and Sinyongsan Station. The company aims to create a development similar to Japan's Roppongi Hills, a globally successful mixed-use project.

In 2023, the year after the Gwangju accidents, HDC Hyundai Development Company's maintenance project orders totaled only 179.4 billion won. Last year, this rebounded to 1.3332 trillion won, and this year the total has reached 993.4 billion won so far. If the company secures the Yongsan Maintenance Depot Zone 1 contract, it will mark its largest single-site contract since the accidents.

POSCO E&C Promises Han River Views for All Units: "We Will Also Take Responsibility for Vacancy Risks"

Bird's-eye view of Otier Yongsan. Provided by POSCO E&C.

POSCO E&C recently suffered a major blow due to the collapse of the Gwangmyeong Shinansan Line tunnel, which resulted in one fatality and disrupted the entire construction process. The Ministry of Land, Infrastructure and Transport is still investigating the incident. Although the accident occurred in the civil engineering division, it has damaged the company's credibility and image. POSCO E&C is pouring all its resources into the Yongsan Maintenance Depot Zone 1 project, viewing it as a "gateway" to entering the core area of southeastern Seoul.

POSCO E&C aims to restore its premium image through its high-end brand, "Otier Yongsan." The company is offering an additional relocation loan with a loan-to-value (LTV) ratio of 160%, committing to secure the entire 4 trillion won project cost, and providing 1.5 trillion won in project acceleration funds without guarantees?demonstrating formidable financial strength. The construction cost is 8.93 million won per 3.3 square meters, slightly higher than that of HDC Hyundai Development Company. Flexible financial management, such as an 18-month deferred payment for construction costs and a structure for repaying sales revenue, is also highlighted as a strength.

POSCO E&C is introducing a unique exterior design in collaboration with UNStudio and specialized planning that takes the natural landscape into account. A key strategy is the "full Han River view," with all units in nine buildings arranged to have river views. Beyond construction, the company is also proposing an "office lease guarantee system," directly assuming the risk of office vacancies and taking responsibility for activating the space.

If POSCO E&C secures the Yongsan Maintenance Depot Zone 1 contract, it will record over 4 trillion won in maintenance project orders for the fifth consecutive year. The company has ranked second in the industry for order volume for the past two years and is currently in second place this year with 3.4532 trillion won, following Samsung C&T (5.0213 trillion won).

An industry insider commented, "Both companies are in desperate situations, so every condition reflects strategies that go beyond a price war," adding, "This may be a battle where image renewal is more important than tangible benefits."